Farmers fear fallout from legislation

February 1, 2014

While U.S. Rep. Glenn "GT" Thompson, R-Howard, touts the five-year farm bill the House passed Wednesday and which the Senate is expected to vote on next week, representatives of some agriculture coalitions are frustrated that dairy farmers won't be as protected as they should be.

"This farm bill is a big win for the nation's economy and will support jobs across (the state), while making necessary reforms that will save taxpayers billions," Thompson said upon the bill's passage.

However, Donna Hall, who is part of Progressive Agriculture Organization and the National Family Farm Coalition's dairy subcommittee, said it leaves dairy farmers out in the cold.

"This farm bill won't save our dairy farmers because it doesn't cover the cost of actually producing the milk," said Hall, who dairy farmed for 47 years in Muncy with her husband. Now they are crop farmers.

The bill creates the Dairy Producer Margin Protection Program, the main feature of the new Farm Bill Dairy Title.

"The margin protection program is a new and unique safety net program that will provide dairy producers with indemnity payments when actual dairy margins are below the margin coverage levels the producer chooses on an annual basis," according to Congressional Quarterly.

While its focus is to "protect farm equity by guarding against destructively low margins," it does not guarantee a profit to individual producers, and supports "producer margins, not prices."

If passed, the program will be established by Sept. 1.

However, Hall argues this won't keep dairy farmers from going out of business.

"This won't insure that the farmer gets his cost of production. It will only insure that his losses are not as great," Hall said. Other costs, such as electricity, fuel, fertilizer, seed, property taxes and more aren't factored into the margin insurance, she said.

"So this does not cover the farmers' cost to produce that milk," she said.

Hall also wants to see the trade issue addressed in the farm bill.

"Free trade is killing our farmers. We need fair trade," she said. "If we don't address this, how can we have any farm bill that's going to be beneficial? If we don't stop the surplus that's coming in here and dropping our farmers' prices, or impacting any supply we have, how can you have a fair farm bill?"

Meshoppen resident Arden Tewksbury, manager of Progressive Agriculture Organization and chairman of National Family Farm Coalition's dairy subcommittee, said while the farm bill contains "many good things," it is lacking.

"Our dairy farmers have really been left out of anything realistic to help them out," he said.

Tewksbury advocates a new pricing formula based on dairy farmers' cost of operation as "the present one has no reference to their cost whatsoever," whereas manufacturers do get enough to cover their costs, he said.

As Thompson is chairman of the House Agriculture Subcommittee on Conservation, Energy & Forestry and a member of the conference committee, Tewksbury asked him to introduce the Federal Milk Marketing Improvement Act. Whereas U.S. Sen. Bob Casey, D-Scranton, introduced it in the Senate, Tewksbury said, it lacks an introductory proponent in the House, and Thompson won't introduce it, said Parish Braden, Thompson's communications director.

"The dairy policy under the new farm bill supports producer margins, not prices, which (Thompson) believes is a fair and effective way to keep farms from going under during hard times and will bring more stability to the industry over the long term," Braden said.

"(Thompson) is familiar with the Federal Milk Marketing Improvement Act. This is a classic supply control proposal, which (Thompson) believes has the potential to create unintended consequences, including reduced growth and competition in the industry, and higher costs for consumers. Overall, he believes the new farm bill provisions are a far superior policy for both farmers and consumers."

Tewksbury fears small dairy farmers may become extinct.

"Yes, the farm bill is necessary, yes it does a lot of good ... but by God, we have to give dairy farmers a price to cover their cost, to give them a fighting chance. We're going to drive more and more family farms out of business and put up more corporate farms," Tewksbury said.

However, Linden dairy farmer Ernie Derr Jr. said what you put into farming is what you get out of it.

"I started out with nothing, and we worked hard and tried to do things the way they should be done, and right now we're really doing good," Derr said. "I try to find the good in everything, and we're making a good living."

Adaptability is key to farming success now, he said. He started with 28 cows 28 years ago, and now has 75.

"We don't farm the way we did 50 years ago. That's the biggest thing, to keep up on the times as much as you can afford," as farming tactics have changed, Derr said.

Ultimately, he said, "I can't say anything negative about farming; I grew my family up with it."

Gary Hennip, of Rome, who grew up on a dairy farm in Bradford County and worked as a herdsman for a county registered Holstein dairy farm, is a Penn State Extension dairy educator.

He noted the bill eliminates direct payments to producers.

"Now we'll rely more on risk management, which is an insurance-type policy," Hennip said.

According to Congressional Quarterly, "Direct payments provide farmers and other producers with fixed annual payments based on their farms' historical crop production and do not vary with crop prices or crop yields."

However, "There is broad agreement that the current payment programs unfairly favor certain commodities and often provide assistance regardless of whether it is needed," according to the report.

Now, if prices dip too low, farmers will need to "be involved in this insurance-type program to get paid," Hennip said.

Craig Williams, of Knoxville, who runs a 100-acre crop farm, and serves as Penn State Extension dairy educator for Tioga County, said the bill eliminates subsidies for corn, while continuing some subsidies for crop insurance.

The corn subsidy elimination "is not as big an impact on farmers as the price of corn going up and down," Williams said.

For now, it's a wait-and-see game.

"We need to take a little time here to figure out how this really affects us now," Williams said.